Cliffs Chromite Project: Answers Needed Before Decisions are Made – by Steve May (SudburySteve.blogspot.com – May 10, 2012)

Steve May is the CEO of the Sudbury Federal Green Party Association (Opinions expressed in this blog are my own, and should not be interpreted as being consistent with the views of the Green Party of Canada – Steve May)

I read with interest today a number of news reports related to the announcement that Cliffs Natural Resources will be investing approximately $3.3 billion in Ontario, to build a chromite mine in the Ring of Fire, and a ferrochrome processing facility in my city, the City of Greater Sudbury. That Cliffs has been pushing ahead with developing the Black Thor deposit in the Ring of Fire has been no secret. What was up in the air, however, was the selection of a community to host the prized ferrochrome processing facility (smelter), which is expected to generate approximately 400 operational jobs, and an additional 400 construction jobs.

Today’s announcement identifying the Moose Mountain site outside of the Capreol community in the City of Greater Sudbury as the new home for the smelter was one of the worst-kept secrets in Northern Ontario. While the communities of Greenstone, Thunder Bay and Timmins were also in the running, Cliffs has been proceeding since the fall of 2011 with an Environmental Assessment process based on a “base case scenario” which identified Moose Mountain as the site of the smelter, and media has since reported that Cliffs has actually purchased the Moose Mountain site.

However, the announcement appears to have been structured in a way which suggests that the Cliffs Chromite Project is a “done deal”, and that only the specifics now need to be worked out. This, to me, seems incredibly premature, given that the environmental assessment process, flawed as it is, is just getting underway. Wouldn’t it be more astute to wait for that process to unfold before assuming that the project is viable?

Or is the environmental assessment process really just window-dressing?

A B.C. Comparison

A few weeks ago, the British Columbia provincial NDP made national headlines when it was revealed that they had written to the National Energy Board on the proposed Northern Gateway Pipeline, which is intended to transport bitumen from the Alberta tar sands to the port of Kitimat on the B.C. coast. The BC NDP took a position that it did not support the proposed pipeline. At the time, B.C. Liberal Premier Christy Clark took some heat because her government hasn’t taken a position on the pipeline. Clark maintained that it would be premature for her government to take a position one way or the other until all of the technical information has been produced and made available to the public for review.

Clark’s position with Northern Gateway was echoed today by Bill Boor, Cliffs’ Senior Vice President. The Northern Life reports that Boor indicated that objecting to the Ring of Fire development on environmental grounds is “premature”, since the project is only now moving into the feasibility and environmental assessment phase (see: “First Nations fuming over smelter decision”, The Northern Life, May 9 2012).

I believe that Boor is correct: without all of the facts available (because they are still being assembled), it really is premature to simply oppose this project over environmental concerns, because we just don’t have answers to all of the questions yet. However, I have to acknowledge that there are likely other valid reasons for some to find themselves opposing this project at this time. I have been asked a number of times now what my own position is on the project, and I have caused some a considerable degree of discomfort when I have stated that I’m not ready to take a position yet, precisely for the reason which Boor has identified.

With respect, although Boor does not say this, I believe that it is also premature for decision-makers to support this project until such a time that all feasibility and environmental assessment work has been completed. It only makes sense that decision-makers wait for assessment processes to be completed, and to then use actual information and data to make an informed decision. That’s the way things should work, if the environmental assessment process is to be taken seriously.

Roles in Decision-Making Processes

However, with Cliffs, it appears that some of our elected officials have taken a different approach than the one B.C.’s Premier has taken on Northern Gateway. I guess I shouldn’t be surprised, given that during the 2011 Ontario provincial election, Progressive Conservatives, Liberals and NDP candidates for Sudbury and Nickel Belt all offered their unabashed support for Cliffs building a smelter in Greater Sudbury, even before the environmental assessment process – which is intended to inform decision-makers – had even started.

This may have been good politics, but it was also certainly premature, given that these candidates were vying for positions in government. And to me, it spoke volumes about these three political party’s commitments to issues related to public health and the natural environment, and to their desire to take action on climate change.

It may sometimes be necessary to adopt a position when your role in the decision-making process is one which is limited to influencing outcomes. It’s often difficult to exert much in the way of influence at all until a clearly articulated position has been taken. But when you are a public decision-maker, and when the decision is one which you are going to wear, it really makes sense that you wait until all of the information is available, so that you can adequately balance competing interests based on real data, and not simply on perception. That’s why I think that the approaches adopted by both the BC NDP and the BC government of Premier Clark were the right decisions to take, given their respective roles in the decision-making process.

Increasingly, we are seeing decisions made by our governments based not on science and information, but for ideological reasons. If anything, these decisions are being made in the absence of data which might assess a complete range of impacts. In the year 2012, our elected officials should know better, as we have accumulated considerable knowledge now which suggests that we end up with negative impacts and paying more when decisions are made which do not address a complete range of issues. With this knowledge, it’s almost as if our decision makers must wilfully blind themselves when making a decision in absence of facts and data pertaining to anything beyond their very narrow definition of economic benefit.

Triple-Bottom Line Analysis

Frankly, I’m growing extremely weary of the attitude taken by many of our elected officials that we must prostrate ourselves at the shrine of economic growth, potentially sacrificing concerns about health and environment in the process. Again, we are offered a false choice between the “economy” and the “environment”, one where the economy must win out every time.

This approach doesn’t even make sense to me from an economic perspective, as we’ve seen time and again. We need look no further than to yesterday’s federal Environmental Commissioner’s report, which once again highlighted the price tag taxpayers must pay to remediate environmental hazards created by for-profit private enterprises (estimated by Environmental Commissioner Scott Vaughan to be $7.7 billion for about 13,000 known contaminated sites).

Yes, it’s true that the rules have changed since many of those sites were abandoned by industry, and it’s also true that development within the Ring of Fire today would not likely find itself in a similar circumstance regarding remediation when mines are closed. But it’s also true that not all environmental costs have been internalized through legislative processes. Taxpayers continue to pay significantly for damage done to our health and to our natural environment by industries which are making profits extracting and processing our resources. In Canada, we continue to privatize profits and socialize losses. And that’s simply not a sustainable approach to resource management.

It’s past time that our decision-makers apply a triple bottom line analysis to the development of all new projects. A triple bottom line analysis will assess economic, social and environmental impacts, positive and negative. It would also determine the value of all costs, so that if taxpayers are asked to pick up the tab for some of the costs, at least it will happen with the knowledge that full costs have been assessed.

Cliffs Chromite Project – Unknown Costs

What potential costs might taxpayers be on the hook for paying for with the Cliffs Chromite Project? There are several which we need to know more about. One of my personal concerns has to do with the minimization of climate change-causing greenhouse gases, as climate change adaptation is estimated to cost Canadians an additional $7 billion dollars by the year 2020. The longer we wait to take action to transition to a low carbon economy, the greater we are going to have to pay for it later (or more precisely, the greater the bill will be that we pass along to our children, since many of today’s decision-makers won’t be around in a couple of decades when we’ve passed the tipping point of two degrees Celsius and have to deal with runaway global warming). Greenhouse gas emissions represent real costs to taxpayers, as currently emitters are not required to pay for the pollution emitted.

Currently, we don’t know anything about who is going to pay to build and maintain new transportation infrastructure in Northwestern Ontario. Cliffs is proposing to transport materials from the Black Thor deposit to a railhead near Nakina, where it will be loaded onto an existing rail line for transport to Capreol. To do this, Trunk Highway 643 will need to be extended 260 km through the boreal forest and boggy James Bay lowlands. When production at Black Thor is up and running, Cliffs estimates that between 50 and 100 transport trucks a day will use this road. Cliffs points out that other communities along the route will also benefit from increased accessibility, and therefore the cost of this infrastructure should be shared.

Road Vs. Rail – What are the Costs?

Truck traffic is a significant contributor to greenhouse gas emissions. A more efficient and sustainable transportation option would appear to be a rail corridor to the existing rail line, approximately 300km from Black Thor. A rail corridor may have higher upfront costs, but maintenance may actually be lower over the long term, as the corridor itself would not need to be as wide as would a corridor for a highway (a physically narrower corridor would also benefit wildlife which may have to cross it). Transporting materials by rail will cut down greenhouse gas emissions.

Interestingly, Noront Resources, which is also proposing to develop a chromite mine in the Ring of Fire not far from Cliffs Black Thor, is proposing to transport ore by rail through a different corridor. However, there is no co-ordination at all occurring between Cliffs and Noront, and our existing environmental assessment process does not require that there be any co-ordination, as absurd as that sounds. Ontario taxpayers might end up on the hook financing both a road and rail corridor to remote locations within hiking distance of one another.

Back to Cliffs proposal, though. Would a rail corridor be cheaper than a road? The truth is, I don’t know if a rail corridor would be less costly than a road, or what the total tonnage of carbon emissions saved might be. But I’m not the expert here; nor am I trying to demonstrate that a significant industrial project is viable, and will profit my shareholders. I’m not the person who should be looking into having these questions answered. Cliffs should be doing that, and our governments should be requiring that they do so.

Instead, with today’s announcement, it appears that our elected officials have embraced the concept of building a new road – without even looking at whether rail might actually make more sense and be less expensive to taxpayers over the long term, or how taxpayers might benefit by requiring co-ordination with Noront. And there was no discussion at all about reducing greenhouse gas emissions.

Embracing the road concept over rail appears to me to be putting the cart before the horse. Why not wait for Cliffs to provide real answers to the road vs. rail questions, which one would think they ought to be doing through the environmental assessment process.

Well, actually, it’s not clear from the paper-based environmental assessment process that transportation alternatives are actually going to be looked at. Right now, our federal government is in the process of repealing the Canadian Environmental Assessment Act, and replacing it with a watered down version which may not actually require that alternatives be looked at when new industrial projects are proposed. And since it’s not clear whether Cliffs will be proceeding based on the existing legislation or the new legislation, it remains to be seen whether the EA process will even ask the question, “What makes more sense from an economic/social/environmental perspective, road or rail?”

Energy Costs

Other questions remain regarding greenhouse gas emissions, particularly as they relate to Ontario’s energy needs. The ferrochrome production facility to be built at Moose Mountain near Capreol is estimated by Cliffs to require as much energy needed to power a City of 300,000 people. Along with a lack of information related to emissions, questions remain as to just who is going to pay for this electricity? Is Cliffs going to be expected to pay market prices for their electrical needs, or will there be subsidies (meaning, will taxpayers be on the hook for socializing costs while Cliffs pockets the profits?)

Air and Water Quality

The ferrochrome production facility will be located to the west of Lake Wanapitei, one of the sources of Greater Sudbury’s drinking water, however the site itself is located within the Vermillion River watershed. It’s not unreasonable to be concerned about air quality issues related to precipitate arising from industrial smelting processes, and whether air-borne precipitate might nevertheless end up Lake Wanapitei. I understand that Cliffs will be looking at these air-shed issues as part of the EA.

Chromium 6 – Hexavalent Chromium

One of the big environmental concerns with chromite mining and smelting has to do with the presence of hexavalent chromium (Chromium 6), which can get into surface and groundwater sources. Very small amounts of this extremely toxic substance can contaminate large areas. And since hexavalent chromium is very stable in water and air, it will accumulate locally over time, especially in acidic environments like those found in Greater Sudbury. Hexavalent chromium is very carcinogenic and is known to create multiple health risks.

Two words: Erin Brokovich. If you haven’t heard of hexavalent chromium, you’ve probably heard of Ms. Brokovich or are at least aware that Julia Roberts played her in a movie by the same name. The substance which was contaminating the water in Erin Brokovich’s community was hexavalent chromium. The California Environmental Protection Agency suggests that acceptable levels of hexavalent chromium in drinking water should be 0.02 parts per billion, which itself is estimated to create 1 additional cancer patient a year. What level of exposure can we expect in Greater Sudbury?

What are the potential health risks Greater Sudburians can expect if the ferrochrome processing facility is built? Will some Greater Sudburians be at higher risk than others, due to geographic proximity, or being downwind or downstream from the facility? Again, these questions have yet to be answered. And again, the lack of answers here hasn’t prevented our elected officials from trumpeting the selection of Greater Sudbury to be the home to the smelter.

Done Deal

Many questions remain to be answered. I hope that the on-going environmental assessment process will answer all of these questions, but from what I’ve seen, it’s quite likely that the flawed assessment process won’t address at least some of these concerns (especially related to electricity pricing and greenhouse gas emissions). Until all of the technical studies have been done, and the data has been made available to experts and to the public for review, it seems to me that it is premature to determine whether Cliffs’ investment in my community will be a positive or a negative for Greater Sudburians. A real triple bottom line analysis is needed. But I’m not optimistic that we’ll end up getting one, given that it appears that the project may already be a “done deal”. Concerns about social, environmental and First Nations issues may have to take a back seat again to a short-sighted definition of “economic benefit”.